If you want to buy a bar in Tenerife, probably the first thing you will think about is the costs. You might have seen the price of a bar in Tenerife that you like, and you might think to yourself, “I can just about scrape that together,” but there are more costs involved than simply the purchase price.
There are two ways in which you can buy a bar in Tenerife, and the costs between the two vary greatly.
The first option when buying a bar, cafe or restaurant in Tenerife is Leasehold, which is often referred to as a Traspaso. In addition to the price of the lease, are the costs involved in transferring the lease into your name. This will require a lawyer or a Gestor, who is likely to charge about €1,500. It is usual to pay a security deposit on rental contract when you lease a bar in Tenerife, and although this money is not lost, it is still capital that to all intents and purposes, you cannot use. The amount of security deposit may vary between 2 and 6 months of rent.
If you are buying a freehold bar in Tenerife, then the costs will be similar to the purchase of any other property, and as a rule of thumb you can safely assume these to be about 8% - 10% of the purchase price.
These costs will include the Notary fee, land registry and a 6.5% transmission tax. If you use a mortgage, then there will be other costs such as the set up fee and life assurance and these will add another 2% of the purchase price to your total costs. Your lawyer / Gestor will charge €1,500-€2000.
In order to transfer the municipal trading license into your name, there will be taxes to be paid on top of the lawyer’s fees. These vary and are calculated by the local authority who will take into account a large number of factors including the size of the bar, the type of license and the location of Tenerife bars. Unfortunately, you can only get an accurate figure for this when your license application for your bar in Tenerife is filed at the town hall.
The only way to get an exact answer to the question is to calculate the costs of the specific bar in Tenerife that you are interested in and your Tenerife Business agent should give you an accurate breakdown before you put money on the table.
You also need to understand exactly what you are buying. Your sale contract may include the equipment, fixtures and fitting of the bar in Tenerife, and if it does not then you will need to add the costs of replacing any of the items that you need. You may also want to refurbish and redecorate your new bar, cafe or restaurant in Tenerife!
A good agent will advise you not to spend all your capital on the purchase of a bar for sale in Tenerife. You will need to leave some money to run the business, especially in the early months. It is no good spending everything on buying a wonderful bar in Tenerife if you can’t afford to buy any beer to serve your customers!